Harbour Energy (HBR) Shares Fell 3.12% Despite $200M Buyback

The Harbour Energy PLC (LON: HBR) share price fell 3.12% despite revealing that its free cash flows tripled in 2022 to a whopping $2.1 billion. However, the company noted that the UK Energy Profits Levy (windfall tax) eradicated almost all of the company’s profits for the year.

Investors’ adverse reaction could be attributed to Harbour Energy’s annual profits after tax falling to $8 million compared to $101 million in the previous year. The company noted that the windfall tax had forced it to reduce its UK investment and staff levels.

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As an independent oil and gas company with most of its operations in the UK, Harbour Energy has been negatively affected by the windfall tax despite its record free cash flow levels. The company had no profits for the year. 

However, the company noted its robust balance sheet and was prepared to keep delivering on its promise to build a diversified global oil and gas company. The firm reiterated its commitment to returning cash to shareholders, as evidenced by its $200 million share buyback plan. 

Harbour Energy’s annual report’s financial highlights included the pretax earnings surge to $4.0 billion from $2.4 billion in 2021. The firm’s pretax profits rose to $2.5 billion from $0.3 billion last year. Still, the company’s annual profits fell to $8 million due to a one-time non-cash deferred tax charge associated with the Energy Profit Levy of $1.5 billion. 

The company also approved a shareholder cash distribution of $600 million, with $553 million being returned to shareholders in 2022 and $41 million begging paid out in 2023. The firm reduced its net debt to $0.8 billion from $2.3 billion in 2023. 

Linda Z Cook, Harbour Energy’s CEO, commented: “In our first full year as a publicly listed company, Harbour delivered materially higher production, which – together with improved margins – enabled us to continue to deleverage and make material shareholder distributions. We further developed our Net Zero strategy, setting an interim target, and built significant momentum in our flagship Viking CCS project. Most importantly, we achieved all this while improving our safety record.”

*This is not investment advice. 

Harbour Energy share price. 

The Harbour Energy share price fell 3.12% to trade at 278.05p, from Wednesday’s closing price of 287.00p.